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Activision examines future PS3 support

by on22 June 2009

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Could pull the plug if price cut doesn’t come soon

Activision CEO Bobby Kotick is now freely admitting to anyone that will listen that if Sony does not cut the hardware price of the PlayStation 3, the company might have no choice to pull the plug on future title development for the console.

While software publishers and developers are never shy about the fact that they want lower console prices in order to drive up the user base, it seems that Kotick’s statements echo the same feelings that a lot of publishers and developers have about Sony’s PlayStation 3 pricing at the moment. At $399 the PS3 is still the highest priced console available; and while Sony can continue to crow about the fact that the sales are increasing, the fact is that each month the PlayStation 3 continues to lose ground to both the Nintendo Wii and Microsoft Xbox 360. This is a situation that has not gone unnoticed by publishers and developers.

Publishers and developers also continue to complain about higher development costs on the PlayStation 3 console as well as higher royalty rates. The return on investment is starting to get close to non-existent on the PS3. It seems that Activision, like many, are puzzled by the high price of the PSP Go and the continued software sales lag that has been a problem for that platform, as well. Neither PS3 nor PSP have a high enough software attach rate when compared to other platforms.

According to continued reports, Sony is said to be considering a price reduction for this fall, but that is likely to go hand in hand with the introduction of a new “slim PS3” unit that features additional cost reductions in an effort to better be able to afford dropping the price of the unit.

While Sony does not seem too worried about the possibility of losing developers or software for their platform, it is obvious that the potential loss of Activision could be big for Sony, as the company has some of the major big hit franchises on the PlayStation 3 platform. A loss of those titles and the potential that the become exclusives on the Xbox 360, for example, could tilt the future even more in Microsoft’s favor going forward.

While this is a game of “what ifs” at the moment, it should be pointed out that Sony was a year late to market with the PS3 and had a lot of problems with the PS3 in general. Many of the issues at the start were related to the choice of the expensive Blu-ray drive, rather than sticking with the standard DVD drive in the unit. Hardware failures, parts shortages, high parts costs, as well as other factors played a major role in the company losing a lot of money on the platform to start with, and Sony’s desire to maintain a high price to help recover from some of these losses.

Last modified on 22 June 2009
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